Under the terms of the deal, AstraZeneca will make an upfront payment of $100 million to US group Bristol-Myers Squibb, which discovered both the saxagliptin and dapagliflozin compounds, a statement said.
Bristol-Myers is in line also to receive up to $650 million from development and regulatory milestones, as well as $300 million per compound for sales milestones.
“Diabetes is a disease reaching almost epidemic proportions in many regions throughout the world and is a particular area of scientific interest for AstraZeneca,” said David Brennan, chief executive of the Anglo-Swedish group.
“This deal represents a significant step in delivering our externalisation strategy as it gives us access to two strategically important late stage compounds in an area of high unmet medical need.”
Bristol-Myers chief executive Jim Cornelius meanwhile said the deal was aligned with his company’s corporate strategy to concentrate research and development efforts on diabetes.
AstraZeneca will fund the majority of development costs until 2009, while any additional development costs will be shared equally.
Saxagliptin is currently in Phase III development and the companies plan to file for US regulatory approval in the first half of 2008.
Dapagliflozin is in Phase IIb development.
The collaboration agreement is worldwide, except for Japan, where Bristol-Myers last month announced an exclusive licence agreement with Otsuka Pharmaceutical for saxagliptin.
The companies said they would jointly develop the clinical and marketing strategy of the compounds, and post-launch will share commercialisation expenses and profits/losses equally on a global basis, excluding Japan.
Sufferers of diabetes have too much sugar in their blood, which if not treated, can lead to eye and kidney disease, as well as causing problems to the central nervous system or heart.